Wal-Mart’s Move Into Groceries Could Help Feed Your Wallet

Wal-Mart.

They’re two words that used to be taken separately.

Put them together and you have the potential for a powerhouse combination that could give long established Canadian supermarkets a giant run for your money.

One of the company’s three so-called “Supercentres” will open in Stouffville Wednesday, (the others are in Ancaster and London) and promises to bring a challenge to firms like Loblaw’s, Dominion and Sobey’s with it.

“Our Canadian customers are telling us they want more assortment,” claims CEO Mario Pilozzi. “They’re the ones telling us they want this one-stop shop.”

Wal-Mart vows almost all the meats and vegetables will come from producers in Ontario.

And it claims you’ll notice a difference even if you don’t buy groceries. The retailer says it will add existing products to its current line-up, going from 80,000 to 120,000.

The store is an impressive 33,000 square feet.  

The question: how do you compete against such a huge entity that’s famous for being big enough to undercut your prices?

According to a recent survey by investment firm Merrill Lynch, it won’t be easy.

“We anticipate much disruption in the market commencing in 2007 and, as such, would not at current levels, advocate putting new money to work in this sector,” analyst Patricia Baker wrote in a note to clients late last month.

Wal-Mart has opened similar stores in the U.S. and they’ve eaten away at long established chains.

It’s expected as many as 15 of the expanded outlets could be open for business by next year and at least 80 percent of the existing stores in Canada could be converted over to the supermarket concept.

As if the parking lots aren’t crowded enough.

So what does all this corporate battling mean to you? Likely more savings, at least during the shake-out period.

Wal-Mart’s marketing muscle is legendary and its insistence on having non-union employees has helped it undercut competitors.

And they are likely to have no choice but to try and match the giant to keep you coming back to their aisles.

But do you really get any bargains?

Like most shopping expeditions, it’s all a matter of what you’re buying and when.

A loaf of Dempster’s whole wheat bread at Loblaw’s was $2.59. Wal-Mart’s Supercentre sliced the price to $1.87.

Barbeque chicken at the former store was $7.99. Wal-Mart undercut it a bit at $7.77.

But No Frills, Loblaw’s cut rate subsidiary, had better prices on some popular items than the new kid in town.

The large container of Tropicana Homestyle Orange Juice, which isn’t cheap no matter where you go, was $5.69. The Supercentre’s price tag read $5.79.

Red Delicious apples were 97 cents at Wal-Mart. But you could take a smaller bite out of your savings by hitting No Frills, where the same fruit goes for 89 cents.

But despite the differences, Pilozzi is sure his company will win – and so will the average customer.

“I think that everyone will get better,” he maintains. “I think that everyone will try to give a better service.”

If you’re not willing to head to Stouffville to check out the new store, one will be coming closer to you soon. Wal-Mart’s supermarket sweep will hit Scarborough, Brampton and Vaughan in 2007.

What’s in a Wal-Mart Supercentre?

The company adheres to a pretty strict formula, because what works elsewhere generally works here, as well. Here’s a look at what a typical supercentre in the U.S. contains, although the Canadian branches could differ:

Meats,
Baked Goods,
Delicatessen items,
Frozen foods,
Milk and dairy products,
Sea food,
Garden produce and products,

Clothing,
Pharmacy,
Tire and lube centre,
Optical centre,
One-hour photo lab,
Portrait studio,
Cell phone store,
Nail salons,

Electronics,
Video rentals,
Bank branch,
Fast food outlet.

Some U.S. supercentres also sell gas, a concept Loblaw’s introduced here at some outlets several years ago.

Wal-Mart currently has nearly 280 stores in Canada, and employs 70,000 people.